10/19/98 POINT AND CLICK FOR PROZAC

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POINT AND CLICK FOR PROZAC

Michael Bruner was shaken by what he learned in medical school. Not only was the state of health care in the U.S. worse than he had imagined, but he also decided that his ability to do much about it as a doctor would be minimal. So after some soul-searching and two years at the University of Pennsylvania School of Medicine, Bruner changed course. His new plan: to find a way to help patients manage their own well-being.
Two years later, Bruner, 30, is on the cusp of doing just that. With $7 million from banks and Silicon Valley venture capitalists, he is readying the launch of PlanetRx, an Internet startup that will throw open its online doors late this fall. That's when the 15-person outfit will take on such giants as Walgreen Co. (WAG) and Rite Aid Corp. (RAD) by selling over-the-counter drugs, medical supplies, and prescription drugs--the latter being an $87.8 billion market. ''That's the sweet spot for consumers and for our business case,'' says PlanetRx Chief Executive William J. Razzouk, a former top executive from Federal Express Corp. (FDX) who joined the company in September.
''LOTS OF COMPETITION.'' PlanetRx's ambitions go far beyond being just a cyberspace corner drugstore. The Oakland (Calif.)-based upstart plans to be a one-stop health shop, offering everything from expert advice from licensed pharmacists to allowing users to keep personal records of their prescriptions on the site. Bruner says that PlanetRx will provide consumers with answers to medical questions their doctors and pharmacists don't have time to address. ''The problem in health care is that patients, doctors, and pharmacists don't talk to each other,'' he says.
PlanetRx isn't the only one trying to fill that void. A bevy of players is scrambling to create online drugstores. From giants such as Kaiser Permanente to tiny startups such as PlanetRx and DrugStore.com Inc., the race to become the Amazon.com (AMZN) of health care is on. ''I'm expecting lots of competition,'' says Peter M. Neupert, CEO of DrugStore.com, a Redmond (Wash.)-based fledgling that hopes to begin selling everything from cotton balls to Claritin early next year.
Maybe that's why Neupert, who spent 11 years at Microsoft Corp. (MSFT), is readying for all-out war. Sources familiar with DrugStore.com say he has snagged $6 million from venture capitalist Kleiner Perkins Caufield & Byers, which backed Amazon, and has kicked in $1 million of his own money. They also say that Neupert is close to pocketing $10 million from Amazon, which could be a potent move if DrugStore.com piggybacks on the online store's distribution and marketing muscle. Neither Neupert nor Amazon would comment.
The startups will need more than good marketing to counter the heavyweight rivals. In March, Merck-Medco Managed Care, which handles prescriptions for more than 51 million consumers, began allowing members to order their refills electronically. Walgreen started letting its customers order refills on the Web a year ago. And Rite Aid not only offers online refills but also reminds customers electronically when their prescriptions need refilling. ''The Internet is ideal for delivering an online pharmacy and health-care service,'' says Martin L. Grass, CEO of Rite Aid, which sells about $500,000 a month over the Net.
Yet for all this enthusiasm, dispensing drugs via the Web is fraught with peril. Unlike buying books, consumers may be concerned about security when it comes to placing drug orders or allowing a Web site to keep their medical profiles. PlanetRx thinks it has that licked with a system that makes unauthorized access to an individual's medical data virtually impossible. The company hopes this--combined with access to reams of medical data--will empower patients. And make PlanetRx a powerhouse at the same time.
By Linda Himelstein in San Mateo, Calif., with Heather Green in New York

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